US Pilots Labor Discussion

[BoeingBoy]

Show me the financial statements that show a profit in 2004, the last quarter of 2004, the second quarter 2005, and first quarter 2005, if you remove the hedging gains.

What - hedge gains aren't real money so don't count as revenue? I guarantee you that the hedge losses in the 4th quarter of 2008 and first half of 2009, when oil dropped to under $40/bbl while US had hedges at $100+/bbl, were real money. Or is just your way of slanting the data to show what you want?

Jim

 

[Phoenix]

A most excellent post! ...

West pilots in favor of abandoning Nic and replacing with LOS = 1


Progress is slow but I think we have a start.

 

[Black Swan]

As I have said the last quarter of 04 and first two of 05 are indications of improvement. You are the king of obfuscation.

America West Airlines Inc, et al. · 10-K · For 12/31/06
Filed On 2/27/07 9:54pm ET · SEC Files 0-12337, 1-08442, 1-08444 · Accession Number 950153-7-433


AWA’s Results of Operations

In 2006, AWA realized operating losses of $35 million and a loss before income taxes and cumulative effect of change in accounting principle of $33 million.

In 2005, AWA realized operating losses of $120 million and a loss before income taxes and cumulative effect of change in accounting principle of $195 million.

In 2004, AWA realized operating losses of $16 million and a loss before income taxes and cumulative effect of change in accounting principle of $85 million.



AWA’s Results of Operations

In 2006, AWA realized operating losses of $35 million and a loss before income taxes and cumulative effect of change in accounting principle of $33 million. Included in these results is $79 million of net losses associated with its fuel hedging transactions. This includes $9 million of net realized losses on settled hedge transactions and $70 million of unrealized losses resulting from the application of mark-to-market accounting for changes in the fair value of fuel hedging instruments.

The 2006 results include $17 million of net special charges, including $68 million of merger related transition expenses offset in part by a credit of $51 million related to the Airbus restructuring. The 2006 results also include nonoperating expenses of $11 million related to $6 million for prepayment penalties and an aggregate $5 million write off of debt issuance costs in connection with our refinancing of the ATSB and GECC loans.

In 2005, AWA realized operating losses of $120 million and a loss before income taxes and cumulative effect of change in accounting principle of $195 million. In 2005, AWA changed its accounting policy for certain maintenance costs from the deferral method to the direct expense method as if that change occurred January 1, 2005. This resulted in a $202 million loss from the cumulative effect of a change in accounting principle. See Note 2, “Change in Accounting Policy for Maintenance Costs,” to AWA’s consolidated financial statements in Item 8B of this report.

AWA’s 2005 results include $75 million of net gains associated with its fuel hedging transactions. This includes $71 million of net realized gains on settled hedge transactions and $4 million of unrealized gains resulting from the application of mark-to-market accounting for changes in the fair value of fuel hedging instruments.

The 2005 results include $106 million of special charges, including $13 million of merger related transition expenses, a $27 million loss on the sale and leaseback of six 737-300 aircraft and two 757 aircraft, $7 million of power by the hour program penalties associated with the return of certain leased aircraft and a $50 million charge related to an amended Airbus purchase agreement, along with $7 million in capitalized interest. The Airbus restructuring fee was paid by means of setoff against existing equipment purchase deposits held by Airbus. The 2005 results also include nonoperating expenses of $8 million related to the write-off of the unamortized value of the ATSB warrants upon their repurchase in October 2005 and an aggregate $2 million write-off of debt issuance costs associated with the exchange of the 7.25% Senior Exchangeable Notes due 2023 and retirement of a portion of the loan formerly guaranteed by the ATSB.

In 2004, AWA realized operating losses of $16 million and a loss before income taxes and cumulative effect of change in accounting principle of $85 million. Included in these results was a $16 million net credit associated with the termination of the rate per engine hour agreement with General Electric Engine Services for overhaul maintenance services on V2500-A1 engines. This credit was partially offset by $2 million of net charges related to the return of certain Boeing 737-200 aircraft, which includes termination payments of $2 million, the write-down of leasehold improvements and deferred rent of $3 million, offset by the net reversal of maintenance reserves of $3 million related to the returned aircraft.

The 2004 results also include a $24 million net gain on derivative instruments associated with AWA’s fuel hedging program. This amount includes $26 million of realized gains on settled hedge transactions and $2 million of unrealized losses resulting from mark-to-market accounting for changes in the fair value of AWA’s fuel hedging instruments. A $6 million charge arising from the resolution of pending litigation, a $5 million loss on the sale and leaseback of two new Airbus aircraft and a $1 million charge for the write-off of debt issuance costs in connection with the refinancing of the term loan were also recognized in 2004.

41

 

[BoeingBoy]

Just refuting with actual quotes from your leader.

I did love the last part you highlighted about the ATSB loan. You do know that US renegotiated those terms 3 times during the course of BK2 don't you? Including the provision that 100% of the proceeds of any sale of assets was to go toward payments on the loan. That's how the minimum cash balance required was reduced 60% and the sale of the 170's/slots brought in cash that was used to keep the doors open till the merger.

Jim

 

[Phoenix]

Adding to your comment, if the arbitrator's decision went DOH the west would have agreed to it even though we disliked it. We would have accepted the fact that a final and binding decision was made and moved on. Subsequently we would have voted for a contract based on its merits.

I believe that once the court speaks and the east realizes that the Nicolau is the only list there will be the east will vote on a contract based on its merits, knowing that otherwise things will never improve.

Your conversation with Elvis might not carry much weight with the rest of us.

 

[Piedmont1984]

You can hold the 767 I right now, captain in PHL. You upgraded to left seat in 5 yrs, and made some good coin for a lot of those years. I really don't think your definition of hurt, with regard to an 88 hire on is even close. You are right, if the west would come off the Nic, there might be some room to negotiate.

Yes, I can hold reserve 767 in PHL and spend my life at the Day's Inn. I choose not to. My point is that there are not enough widebody captain slots for every '84 or '85 hire who wants one.

The west can't come off the Nic, or anything else. There is no bargaining entity called the west. The posters you spar with on these boards don't have the authority or capacity to come off the Nic. It is USAPA that needs to make the first move. Such a move would shift the silent majority in the west to support our efforts at the bargaining table, as well as our up to now puny efforts at demonstrating our displeasure with the status quo to the company, and seriously undermine or weaken any DFR II prospects for success.

 

[Black Swan]

I did love the last part you highlighted about the ATSB loan. You do know that US renegotiated those terms 3 times during the course of BK2 don't you? Including the provision that 100% of the proceeds of any sale of assets was to go toward payments on the loan. That's how the minimum cash balance required was reduced 60% and the sale of the 170's/slots brought in cash that was used to keep the doors open till the merger.

Jim

Jim,

I'm sure Doug "The Closer" can tell you all about this Memo and possibly provide you with an original copy, if you don't know who he is, maybe someone's nephew can help you get in touch with him.

The Swan


Merger Mania July 22 2005

Pieces of the Puzzle

Capt. Ken Stravers, Chairman, MEC Merger Committee

Last Friday, July 15, your MEC and chairmen of the Merger, Negotiating, and Communications Committees met with Doug Parker, Jeff McClelland, Dave Seymour, and Shirley Kaufmann from America West management. DougParker opened the meeting with an hour-and-15- minute presentation. He provided us financial data concerning our current company position, as well as future projections for the merger of both companies. These cost savings, or synergies, are predicated on this deal being handled in an expeditious manner. Your MEC followed this presentation with an hour and 45 minutes of questions concerning merger, operations, and management style with the new company. Nondisclosure agreements signed by all in attendance preclude us from releasing any details at this time. However, as we receive additional information that we have requested from the company, we’ll form a well-educated decision about the implications of this merger for AWA pilots.

___________________________________________________________________________________________________


I think the pressures and risks are all on your side of the transaction, not the US Airways side. Here are my thoughts.

The judge who has been sheparding US Airways along for the last three years and two bankruptcies will not let it collapse.

Second, I believe that the company can operate without a transition agreement, but you can’t. You have scope protections, but keep in mind that the new company will be US Airways and will be flying under its certificate. While the two companies remain separate, there will be little to restrict the company from shifting flying from AWA to AAA or from allowing all the new flying to AAA without a transition agreement keeping flying separate.



Memo from West Merger Attorney Jeffrey Freund to the AWA ( JRB, JMac & KS ) August 2005.


I’ve been thinking about the status of the Transition agreement and its implications for seniority integration and I wanted to pass these thoughts on to you before the MEC decides how to proceed. I believe that it is very important that you finalize an agreement and do it soon. I think the pressures and risks are all on your side of the transaction, not the US Airways side. Here are my thoughts.

First, whatever you may think about the transaction, I believe that it will be approved and approved promptly. The judge who has been sheparding US Airways along for the last three years and two bankruptcies will not let it collapse. In any event, it will not be ALPA’s objection (assuming you don’t reach a transition agreement and ALPA files an objection) that will kill it. So you should assume it will promptly be approved.

Second, I believe that the company can operate without a transition agreement, but you can’t. You have scope protections, but keep in mind that the new company will be US Airways and will be flying under its certificate. While the two companies remain separate, there will be little to restrict the company from shifting flying from AWA to AAA or from allowing all the new flying to AAA without a transition agreement keeping flying separate.

Third, the implications of that fact to seniority integration are not good. If flying tips to AAA during the transition period, even if we get a “good” integration, AAA pilots will be in seats and a “no bump/no flush” provision will keep them there until a system bid allows seniority to operate unrestricted. That is not a good result for AWA pilots.

Fourth, in an event, as I have explained, to the extent your objections are to the absence of a no furlough clause, I don’t think you will ever get one and I don’t think you want one. You should want AAA pilots furloughed…

Finally, while I know you are trying to capture some additional economics, in these negotiations, this is not the time to draw the line on those issues. You will have other points of leverage during subsequent negotiations to press for those items. I’m not suggesting that you abandon your attempts immediately, just don’t get yourselves in a negotiating position where the deal craters over those issues. In short, I think you should not come out of the next round with the company without a deal.

Dan Atkins and I are intending to be at the meeting by conference call on Wednesday. Please let us know how and when we should do that.

 

[AvgJoe]

Four seniority arbitrations in a row say that slotting by equipment and status is fair and DOH is not.

USAPA supporters run no risk of becoming open-minded even in the face of overwhelming evidence that they're wrong.

So, how many times something happens in history is the measure of weather it's fair or not?

 

[Metroyet]

Jim,

I'm sure Doug "The Closer" can tell you all about this Memo and possibly provide you with an original copy, if you don't know who he is, maybe someone's nephew can help you get in touch with him.

The Swan


Merger Mania July 22 2005

Pieces of the Puzzle

Capt. Ken Stravers, Chairman, MEC Merger Committee

Last Friday, July 15, your MEC and chairmen of the Merger, Negotiating, and Communications Committees met with Doug Parker, Jeff McClelland, Dave Seymour, and Shirley Kaufmann from America West management. DougParker opened the meeting with an hour-and-15- minute presentation. He provided us financial data concerning our current company position, as well as future projections for the merger of both companies. These cost savings, or synergies, are predicated on this deal being handled in an expeditious manner. Your MEC followed this presentation with an hour and 45 minutes of questions concerning merger, operations, and management style with the new company. Nondisclosure agreements signed by all in attendance preclude us from releasing any details at this time. However, as we receive additional information that we have requested from the company, we’ll form a well-educated decision about the implications of this merger for AWA pilots.

___________________________________________________________________________________________________


I think the pressures and risks are all on your side of the transaction, not the US Airways side. Here are my thoughts.

This mythical "risk" was going to be encountered if the West decided to move fwd WITHOUT A TRANSITION AGREEMENT. This oft mis-used quote has absolutely zero reference to the Nic. award. Can anyone argue that it wouldn't have been risky to simply trust management and forgo a formal Transition agreement? Hell no.

 

[Ames]

West pilots in favor of abandoning Nic and replacing with LOS = 1


Progress is slow but I think we have a start.

Yet another easthole twisting and spinning. I am NOT in favor of abandoning the Nic. Final and binding, accepted by Parker. Done deal. When the merger committee was offering to discuss LOS I would agree it was a good start in negotiating. Easthole MC just wouldn't hear it. Nic is a done deal. You got what you deserve because you refused to negotiate. It's just good to see that at least one east pilot is willing to make sense. At least I have proof that ALL of you aren't morons. There had to be one sensible person in the bunch.

 

[Pi brat]

It is sometimes useful for a teammate to throw some cold water on his buddies rather than carry water for them. Here are some issues I have with PI and Swan. The Piedmont pilots wanted nothing to do with DOH in 1988-89 and many were hurt in that merger. I was one of them. Yet the same people proclaim the sanctity of DOH this time around. Seniority based on longevity is fair and good, but longevity and DOH are not the same thing. Credit for time served at a company is not the same as a time stamp indicating when one was hired, when it is followed by years of furlough. Many on furlough went to other carriers, or left the industry - without any regrets and without looking back. They had little expectation of returning to this particular company. If I had continuous service at a company and a furloughee was slotted ahead of me because of an earlier hire date, I would be furious.

The '84/'85 east hires may very well be in the "breach" for a widebody upgrade, but they will stay in that status indefinitely because there are simply not enough widebody slots availlable to accomodate those several hundred in number. Attrition may be a good thing to look forward to, but in my case and those in my age bracket - I am the attrition.

My intuition tells me that if USAPA would move off DOH and move towards LOS, enough pilots in the west would be willing to support this position. If Nicolau came out with a LOS based list, we wouldn't be stuck here today.

We have some great pilots in the east, but as a group we are pretty f#$king stupid. If USAPA doesn't modify it's position, we will be arguing the same thing, right here, three years from now, unless adult supervision in the form of one or more judicial judgements intervenes before then.

Let me tell you something 1984. If you decide to not carry water, at least get it right who you are or are not carrying it for. I'm not one of the pilots that you labeling me as. My arguments are not for DOH, they are agianst the stupid XXX things I see posted on here by clueless west pilots, and against the Nic award.

Got it?

 

[Pi brat]

What - hedge gains aren't real money so don't count as revenue? I guarantee you that the hedge losses in the 4th quarter of 2008 and first half of 2009, when oil dropped to under $40/bbl while US had hedges at $100+/bbl, were real money. Or is just your way of slanting the data to show what you want?

Jim

You are the one slanting. Of course it is real money, but absent them, they would have not had enough revenue to cover expenses and as you show the hedges can quickly go both ways. They lost money in the quarter before and after, right?

 

[Piedmont1984]

Let me tell you something 1984. If you decide to not carry water, at least get it right who you are or are not carrying it for. I'm not one of the pilots that you labeling me as. My arguments are not for DOH, they are agianst the stupid XXX things I see posted on here by clueless west pilots, and against the Nic award.

Got it?

Got it. So now there are two of us who are not arguing for DOH. Still have a ways to go before we have a quorum.

 

[prechilill]

I think a fuse just blew

 

[BoeingBoy]

if you don't know who he is, maybe someone's nephew can help you get in touch with him.

Well, I suspect that nearly every male West employee is someone's nephew so why do I get the feeling you're bringing up Nos' lie?

He provided us financial data concerning our current company position, as well as future projections for the merger of both companies.

Ah, but what were those details about the then current HP position? I can tell you I watch the lotto drawing every week but that doesn't tell you if I won or lost, or even bought a ticket.

You can take Parker/Kirby at their word as given contemporaneously - in 2005 HP was looking at possible liquidity problems, in 2007/8 they would have been filing for bankruptcy, in 2009/10 they would have possibly folded - and take that as what the future held for HP as economic conditions changed or ignore everything they say. You don't get to take something said in 2011 and make that a definite part of the picture in 2005. Just as pilot expectations change due to factors out of their control, so do a company's prospects change due to economic factors.

In other words, in 2005 US' prospects without the merger were much worse than HP's and it's 2005 that the arbitrator looked at. Everything after that is post-merger and should affect the pilots from each pre-merger carrier equally. Unfortunately for the West, the East has gotten most of the post-merger good while they've been stuck with most of the post-merger bad. You and most of the other Easties are happy with that and now want those post-merger gains to continue on the backs of the West, with the excuse that they'll "inherit the airline" in X years. However, as your post shows, a relative few years can make the prospects for any company including airlines vary drastically from projections made a few years prior so by the time West "inherits" the airline it may be an airline that looks a lot like US in BK2. So you want to get yours quickly while it's there and leave the West to deal with whatever the future holds.

Jim